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Rick Wagner Column November 06, 2008

Central planners inevitably foul up the economy

I did not want to take the space to rehash election results that will be beat into the readers’ head by every news and opinion/entertainment outlet on the face of the Earth.

I felt like what we should all do is discuss the economic challenges that are coming our way, why they are so important and how they are the factors that shape politics in a free society, not the other way around.

Whether January will find engineers building a nuclear power plant behind the White House or Justice Department lawyers convening a grand jury to determine who killed the electric car, it will be interesting.

Whether that means “interesting,” as in Washington crossing the Delaware or the Vandals holding their version of spring break in Rome, will reveal itself in its own good time.

Tyrannies have no problem controlling economies; they just arrive at the lowest standard of living as soon as possible and keep people there. All they really need are enough prisons and mental institutions to get the naysayers on the right path and scare the carping out of the whiners complaining about the lack of luxuries — like shoes, food and wondering what happened to that loudmouth cousin of theirs.

Probably the best place to start is the idea that someone has to have a plan. We all like plans, but too much planning can have unintended consequences.

For instance, in the old Soviet Union, the central planning agency’s quest to provide footwear to the Russian population led them to order a certain number of shoes to be made by the government-regulated plants. The plants responded — they made all the shoes, baby shoes. That’s because they were easier to make, could be manufactured faster and since nobody had included that eventuality in their plans, they could put a check mark next to the request: make a certain number of shoes. Plan worked — outcome not so good.

Since planners are not psychics, they cannot anticipate far enough ahead to make allowances for changing needs and conditions. So they simply come up with more plans to try and address these eventualities until the economy is so constricted in its ability to respond to changing conditions that, like the overly talkative mobster, it finds itself resting underwater.

A reckless surge toward the centralization of planning and power to implement that planning lies at the heart of “The Road to Serfdom,” by Edward Hayek. This dense volume, written by a Nobel Prize winner in economics, details this process, where at some point power is too heavily invested in political figures who are convinced an economy can operate by executive and legislative directives.

At some point, the ability for centralized government to anticipate the myriad changes in economic structure and respond to them from a few bleak offices located in the Capitol becomes impossible.

If history has taught us anything, politicians then believe the answer is more planning and more power to implement the plan.

There is no more dangerous time to a free people than one of tremendous economic uncertainty coupled with the rise of simplistic demagoguery. Big words with a simple meaning — if only a strong leader would come along and straighten this out.

Mussolinis, Chavezes and Lenins are more than happy to offer immediate solutions. They are often assisted by the academic left, who in these individuals they perceived a mechanism to strike back for all those years they were not chosen for dodgeball and those in the media who are grindingly eager to affect something, rather than just report on it.

The irony of all this is that after a successful ascendancy of this type of government, the first to mysteriously disappear in the night or wonder while they are blindfolded against a wall are these selfsame folks. They are unable to sense that now that collectivism and central planners have seized control, their criticism is neither welcomed nor expected.

What then is the best prescription for economic success?

A level playing field, an unobstructed view and personal freedom.

Rick Wagner offers more thoughts on politics at his blog, The War on Wrong, which can be reached through the blogs entry at GJSentinel.com.